If the UK does not rapidly increase the generation of fossil fuel-free electricity, it will not be able to fulfill its goal of decarbonizing the power industry by 2035, according to a House of Commons Committee study released on Friday. The Business, Energy and Industrial Strategy Committee recommended better coordination of power sector strategies.
The government will need to respond to international competition for low-carbon energy investment, as well as be more active in coordinating and pushing through the necessary grid upgrades and accelerating the process for planning consents and grid connections, according to its “Decarbonisation of the power sector” report.
The committee also cautioned that because UK renewables developers face substantial cost inflation and less favorable windfall tax breaks compared to the oil and gas sector, the viability of many renewable projects may be in jeopardy.
It demanded that the de facto ban on onshore in England be lifted and that a legal framework be established to permit its use. The report continues, “The government must prioritize work to support long-duration energy storage, decide on the use of hydrogen across the economy, and clarify where private finance for nuclear energy projects will come from.” The government must also make sure that the UK’s ports have the capacity to support offshore wind ambitions.
There are two months for the administration to respond. Energy UK, an industry group, said the findings matched worries expressed by many.
The following Contracts for Difference auction will not consider rising costs for renewable energy developers. A windfall tax that favours oil and gas companies comes at a time when the US and Europe are competing more fiercely for green investment.